How do I keep a beauty supply store’s brand distribution relationships through a sale?

Brands and distributors often decide who may carry their lines. Some have minimum orders, display standards or an approval step for a new owner. Make a list of your main brands and note, for each, how the account is set up, who your contact is, and what you know about their policy on a change of owner.

Next, talk to the suppliers before the news spreads. A quiet call from you, followed by a meeting with the buyer, usually goes better than a surprise letter. The buyer can show their plans, their experience and how they will pay. Suppliers worry about unpaid invoices and falling sales, so be ready to discuss both.

Check the paperwork. If any agreements exist, ask your lawyer to read them for what happens when the shop is sold. Do not guess. Also check which pricing, rebates or credit terms are tied to you personally and which belong to the business. If a major brand will not continue, tell the buyer that early. It may change the plan, and a candid conversation beats a dispute after closing. Having backup suppliers for important categories also reduces the risk for everyone.

Key takeaways

• List each brand, its contact and any written account terms before talking to buyers.
• Introduce the buyer to key suppliers in person, and do it before closing.
• Ask your lawyer what each agreement says about a change of owner.